US fertilizer segment watching but not overly concerned over Canada port strike activity

HOUSTON (ICIS)–As a fresh labor union strike halted activity at Canadian ports along its west coast on Monday, US fertilizer participants were watching the latest worker strife unfold with only moderate concerns over how this activity might disrupt nutrient flow.

Fertilizer sources noted that the sentiment currently is that this work stoppage could be short in duration, as other recent strike actions have turned out with similar results.

As a US trader said, the prior halt of the railroads in Canada “didn’t seem to have much effect on the market last time”.

If this strike activity were to carry forward, domestic sources highlighted that it would not be a widespread event for fertilizers in the US as it would be felt primarily within the potash segment as well as for sulphur movement.

With a domestic participant commenting that for the other nutrients, especially the nitrogen-based offerings, that this latest event “hasn’t yet affected us or any pricing”.

This segment of west coast ports is estimated to move over 21,000 tonnes of potash daily for oversea shipment, with Fertilizer Canada calculating this latest shutdown could cost the industry around (C$) 9.7 million ($7.0 million) per day in lost sales revenue.

The industry group had cautioned ahead of the strike occurring that another disruption to Canada’s supply chains would further damage the country’s reputation as a dependable trading partner and jeopardizes food security around the world.

“We are once again on the brink of losing access to a critical trade corridor, and potash fertilizer will be one of the hardest hit commodities,” said Karen Proud, Fertilizer Canada president and CEO.

The group noted that the 2023 labor disruption of west coast ports cost the fertilizer industry over C$126 million and took 13 days to resolve and that Canada lost significant market share to Russia in key markets such as Indonesia and Malaysia afterwards.

Fertilizer major Nutrien said its main concern was that the strike action will prevent potash marketing agency Canpotex from exporting volumes out of the Port of Vancouver.

“Canpotex is exploring alternatives to mitigate the potential impact to customers, however a prolonged disruption could negatively impact farmers and food security around the globe,” said a Nutrien spokesperson.

“We urge the parties to come to an agreement before damage is done to Canada’s reputation as a reliable, global potash supplier.”

($1 = C$1.39)